Cash windfall from Trump's tax law may fuel corporate dealmaking boom

Via Billy

For U.S. corporations seeking to grow through acquisitions, there’s no time like the present to make a deal.

A tax break signed into law by President Trump last month, which lets firms bring overseas earnings back to the U.S. without a penalty once they pay a one-time levy and reduces the top tax rate to 21 percent from 35 percent, is giving corporate America enough cash to fuel an increase in takeovers after two straight years of declines, according to Wall Street economists and analysts.

“One of the major impacts there will be from tax reform is a pickup in mergers and acquisitions,” Erin Browne, head of asset allocation and investment solutions at Swiss bank UBS, told the Washington Examiner.

“A lot of dealmakers will now start to repatriate some cash from abroad,” building reserves that can then be spent on buying companies, pushing U.S. dealmaking up from a comparatively mediocre $1.3 trillion last year, said Elizabeth Lim, a senior research analyst with Mergermarket, which tracks global acquisitions.